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May 2014

ChartWatchers

PMO BUY Signals Reviewed From DP 152 Blue Chip Tracker Report

by Erin Swenlin

The DP Tracker reports are full of information on a variety of stocks and ETFs. Here is a link to a blog with more information on DP Trackers and how to find and use them. I took at look at Friday's DP 152 Blue Chip Tracker Report to find what stocks had gone on PMO crossover BUY signals. What is helpful about this report, especially the signal table portion, is if you find a stock with an interesting signal or strength ranking, you simply click on it to bring up the chart of that stock, ETF or mutual fund. Below is an excerpt of the PMO Crossover Signals table from the 152 Blue Chip Read More 

ChartWatchers

The Nasdaq Bullish Percent Index ($BPNDX) Is Suggesting This Is The Time For Caution

by Greg Schnell

Many investors were enjoying the ride up in growth stocks through 2013 and into 2014 this year, when the whole group started dropping. This drop spilled over to the Nasdaq 100. Since early May we have bounced. Today, I have some concerns with regards to the Nasdaq 100 Bullish Percent Index ($BPNDX) chart. While we don't know the outcome yet, we do know it is an important place on the chart.  The chart is a little busy looking because of the area chart in the background. Just by looking at the chart broadly, the $BPNDX can be split into bull markets and down/corrective markets at Read More 

ChartWatchers

Small Caps: Turn Around Approaching?

by Tom Bowley

I've been very cautious about the stock market throughout most of 2014.  There are warning signs galore.  But the Russell 2000 has been hit particularly hard year-to-date, dropping approximately 10% from the high set in early March.  That was the time when money began rotating away from many of the momentum names and traders turned from "risk on" to "risk off" mode.  Many small cap stocks have taken the brunt of the selling.  The short-term news isn't great as a bearish head & shoulders top is in place and the upcoming week is quite bearish historically for Read More 

ChartWatchers

A (Mostly) Complete List of This Year's New Features on StockCharts

by Chip Anderson

Hello Fellow ChartWatchers! While the major averages were mixed last week with the Nasdaq up 0.5% and the Dow down 0.5%, in general the markets continued to weaken.  Check out the Bullish Percent Index chart for the Nasdaq Composite: It has continued to move lower even after crossing the 50% line.  That doesn't bode well for Nasdaq stocks.  For more, skip down to John, Arthur, Greg and Tom's articles.  I, on the other hand, want to talk about something that is increasing in value All the New Things at StockCharts.com This Year Read More 

ChartWatchers

A Comparison of Global Stocks Shows Unusual Divergences

by John Murphy

While U.S. stocks are starting to struggle on fears of high valuation, some money is starting to flow into foreign stocks that show better value. The chart below shows the S&P 500 doing better than foreign developed and emerging markets since the October 2011 bottom. During that time span, the S&P 500 (representing the U.S.) gained 65% versus a 54% gain in the EAFE Index (representing developed markets in Europe, Australasia and the Far East). The worst performer by far have been Emerging Market iShares which gained only 28%. Given the historic tendencies for global stocks to be Read More 

ChartWatchers

10-Year Treasury Yields Fall to Seven-Month Low

by John Murphy

The first chart below shows the 10-Year Treasury Note Yield (TNX) falling below its early February low in trading on Wednesday. That puts the TNX at the lowest level since last October. Normally, a falling bond yield signals that investors are turning more pessimistic on the economy. That seems strange considering that the Dow and S&P 500 have just hit record highs. The discrepancy between falling bond yields and rising stock prices is just another sign that the recent large cap rally may not be as strong as it appears. The next chart shows the Read More 

ChartWatchers

The 1% EMA A-D Index: A Long-Term Breadth Indicator

by Carl Swenlin

Our focus is so often on the short term, but an awareness of what is happening longer-term is essential to getting a complete sense of market condition. One useful long-term indicator is what we call the 1% EMA of the Advance-Decline Ratio. I first learned of this indicator from Stan Weinstein's 1989 book, Secrets for Profiting in Bull and Bear Markets. He used a 200-day simple moving average of net breadth and called it the Momentum Indicator. When I started tracking it, I found it much easier to use an 0.01 exponential average (200-SMA equivalent). Simple buy and sell signals Read More 

ChartWatchers

$LUMBER Is A Key Indicator For Housing : Decision Time

by Greg Schnell

$LUMBER is a rarely watched indicator relative to $COPPER, $GOLD, and $WTIC. But Lumber is a valuable signalling tool. Let's pull up the long term chart and discuss why. I want to spend a minute on the RSI because this chart is a classic with respect to Constance Browns work on the RSI. First of all Ms. Brown discovered that Bull markets oscillate between 40 and 90 and Bear markets oscillate between 10 and 65. Starting on the left, during the entire downtrend in 2006, 2007 and 2008, the RSI stayed in bear territory as shown by the Red line.  After climbing above 40 in April of 2009 Read More 

ChartWatchers

DecisionPoint Trackers: Timing Signals and Strength Rankings Across the Markets

by Erin Swenlin

Before there were scans, there were DecisionPoint Tracker Reports. While my scans are useful, the Tracker reports still provide some of the best timing and ranking information around to help you sniff out investment opportunities across the major indexes, ETFs, S&P 400, 500 & 600, mutual funds and more. You'll find the Trackers in where else? The DP Tracker blog! You can access the DP Trackers blog only if you are paid member of StockCharts.com so DecisionPoint transplants, you need to renew right away (check my article on how and why to renew in the DecisionPoint blog)! You can Read More 

ChartWatchers

Another Wedge worth Watching

by Arthur Hill

As noted in ChartWatchers two weeks ago, rising wedges are appearing on some key charts and chartists should watch these closely for directional clues. Even though the rising wedge can be a bearish continuation pattern, keep in mind that the immediate trend is up as long as the wedge rises. We should respect this uptrend until proven otherwise. A break below wedge support would reverse this immediate uptrend and signal a continuation of the prior decline. A move below the prior low is then expected and chartists can use the measured move technique for targets. Measure the distance of the Read More 

ChartWatchers

Gold Breaks Out of Falling Wedge

by Carl Swenlin

Gold broke out of its recent falling wedge pattern, which is the normal expectation for that pattern. The weekly chart shows price sliding down the declining tops line. Nice that it is staying on top of the line, but it needs to reverse direction. Despite the breakout, as of 4/22/2014 Gold is on a Trend Model SELL signal. The Long-term Trend Model is also on a SELL signal going back to 2/15/2013, so our long-term posture on gold remains bearish. - Carl Read More 

ChartWatchers

Tracking Down Great Stocks with DP Trackers

by Chip Anderson

Hello Fellow ChartWathcers! April ended on a fairly positive note with all of the major US average up about 1% for the week.   That comes as we head into what has been - at least over the last 5 years - the worst month of the year for the S&P 500.  Courtesy of our Seasonality charting tool, here is the phrase "Sell in May and go away" pictured in one chart: So, to offset (partly) that not-so-cheery news, I thought I tell you about our latest addition to StockCharts.com - the DecisionPoint Tracker Reports! Tracking Down Great Read More 

ChartWatchers

Cyclicals Not Worth The Gamble

by Tom Bowley

In 2013, market participants couldn't get enough of cyclicals, or consumer discretionary stocks.  The XLY (ETF that tracks consumer discretionary) rose more than 40% in 2013 to lead all sectors on a relative basis.  But things have changed in 2014, with many of the strong industry groups in 2013 lagging badly in 2014.  A prime example is the Dow Jones US Business Training & Employment Agencies index ($DJUSBE).  Take a look at how quickly this industry group has fallen from power: Fundamentally, it doesn't make a lot of sense.  Didn't the Read More 

ChartWatchers

$NYSI or $NASI, Which One Is Right?

by Greg Schnell

The summation indexes built by Sherman and Marian McClellan are almost paradoxical this week.  The $NYSI and the $NASI usually track similarly. Which one will be right? Here is the chart. In Plot 1, the candlesticks are the $NYSI - New York Stock Exchange Summation Index and displayed behind on an area chart is the $SPX. In Plot 2, the candlesticks are the $NASI - Nasdaq Stock Exchange Summation Index and displayed behind on an area chart is the $NDX. Historically, when the summation indexes can't stay above zero, the stock market is very weak.  When they both thrust up Read More 

ChartWatchers

U.S. Dollar is Testing Important Support Line

by John Murphy

The dollar has been weakening since the start of the year, and is now in the process of testing some important chart support. The weekly bars in the chart below show the U.S. Dollar Index ($USD) testing a support line drawn under 2012-2013 lows. A decisive close below that trendline would represent a technical breakdown in the greenback. There would be at least two possible side effects if that were to happen. One would be a boost in commodity prices (like gold) which generally rise when the dollar falls. Another potential side effect of a weaker dollar is that it favors foreign stocks Read More 

ChartWatchers

Watching the Wedges in Finance and Technology

by Arthur Hill

The Technology SPDR (XLK) and the Finance SPDR (XLF) remain in uptrends overall, but Friday's intraday reversal could signal a near term peak and result in a bearish wedge. The first chart shows XLK hitting a new high in early April and then declining below 35.25 with a sharp pullback. This decline seems deep and drastic, but it is not any deeper than the late January decline, which did not result in a long-term trend reversal. As with the late January decline, XLK recovered after the early April decline and moved right back towards its highs last week.  Read More